Scanning For Savings

At Lance Inc., a Charlotte, N.C., snack food manufacturer and distributor, workers pick and load some 325,000 cartons of product onto trucks each week for direct delivery to more than 1,800 Lance sales representatives nationwide.

Lance drivers deliver about 90 percent of those cartons to unattended warehouses maintained by the sales reps, says Doug McCraven, Lance materials manager. But until recently, Lance had an inventory control problem.

"We were having an issue where our sales reps would transmit back on their handheld computers that they were short on a certain product, that the drivers didn't put it in their stockrooms, and that they needed a credit," McCraven says. The drivers, meanwhile, would often say that they delivered the product, McCraven relates. On average, the shortages were totaling about 1,300 cases per week.

It says here...

Lance did not have a tight system for dealing with the discrepancies. "All we had was a sheet of paper where a belt captain - a picker-loader - had put a pencil mark, a week earlier, saying he put the product on the truck," McCraven says. "So we had to bring some integrity into that system."

Last year, Lance formed a five-person team to deal with the issue. The team, which included representatives from Lance's engineering, information technology, cost, shipping and materials departments, was headed up by McCraven. The goal was to overhaul the company's order picking and loading processes, and to evaluate and recommend a barcode automation system that could guarantee 100 percent accuracy of boxed products loaded onto the trucks.

The Lance team knew that the variety of its product carton mix - encompassing about 240 different stock-keeping unit (SKU) numbers - would provide a challenge for a barcode reading system. Because Lance distributes products for snack food makers Mars Inc. and Procter & Gamble, as well as its own snack products, the system would need capability to read all of the different barcode symbologies used by each manufacturer. Further, on some carton types, the barcodes are covered with shrinkwrap film, which can cause reflectivity problems for some barcode readers. An added challenge would stem from Lance's use of returnable cartons, on which damage or degradation can make barcode reading difficult.

But perhaps the biggest challenge for a barcode system is the way that Lance personnel pick and load cartons on conveyors that move product to the trucks for loading. "The lightweight nature of our products, such as potato chips, cookies and crackers, means that you're allowed to stack them," says McCraven. Lance picking teams were accustomed to stacking cartons of varying sizes and products up to six boxes high on the conveyors, and in no particular orientation, McCraven says.

For productivity reasons, the company didn't want to give up that practice. "We wanted to be able to put a case of plain chips, barbecue, and sour cream and onion all on top of each other, have them go through the system at the same time, and have the system recognize them for what they were," says McCraven. The company knew from an earlier evaluation of barcode reading systems that this might be a problem. "When we looked at this a few years ago, there was plenty of equipment out there that could scan one box at a time going through the system, but nobody could scan different SKUs stacked on top of each other," McCraven relates.

Additionally, Lance wanted a system that put no restrictions on carton orientation. "We didn't want to have to instruct our employees that for the system to work, they'd have to place the cartons so the barcode is always on the right," says McCraven, "because we knew we would never be able to make that work."

After presenting its requirements to a number of vendors, the Lance team found two systems integrators who said that they were up to the job. With those vendors, the Lance team held a "scan-off," in which the integrators set up their systems in Lance's Charlotte warehouse. "We had both vendors there, running belt-beside-belt, and we measured the accuracy of their equipment," McCraven says. One of the vendors - Charlotte-based Cimtec Automation - was the "hands down" scan-off winner, says McCraven.

Cimtec's solution included a "scanning tunnel," built using barcode scanners from Datalogic Inc., in Hebron, Ky. Multiple scanners are arranged around Lance conveyors in a tunnel configuration. "We've got scanners on each side of the belt and a high scanner above the cartons looking down. This allows us to send the boxes through in any orientation and the system can still see the barcodes," McCraven explains. A Datalogic technology called advanced code reconstruction enables the scanners to reliably read damaged and plastic-covered barcodes. As a result, says McCraven, system read rates are better than 99 percent.

Cimtec solved the challenge of identifying multiple stacked cartons in part by creating a light curtain that the boxes pass through in addition to the scanning tunnel. As stacked cartons go through the curtain - created with multiple miniature light array sensors from Minneapolis-based Banner Engineering - the height of the stack is measured to within 0.38 inch, based on the highest light beam broken, says McCraven. As the stack then passes through the scanning tunnel, a custom software application written by Cimtec enables simultaneous reading of all unique barcodes in the stack. The system looks up each unique barcode, and then compares the stack height, as measured by the light curtain, to the known carton height for each unique barcode detected. This information is used to determine the content and number of boxes in the stack.

Scanning tunnel systems on each of three loading lines used by Lance are linked via Ethernet to personal computers at the end of each line, and to the company's AS400-based business information system. Orders for each truck to be loaded appear on the PC monitors, and loading teams use paper copies of the orders to pick cartons and load them on the conveyors. As the cartons pass through and are identified by the scanning system, they are automatically deleted from the PC order, and are also deleted in real-time from the Lance inventory system, says McCraven.

The scanning system is linked to a mechanical reject station that directs cartons with invalid barcodes to a separate conveyor line. "If the system can't read it, for whatever reason, or if it's not on the order, if it's the wrong product or it's an overage, then the system kicks it off," says McCraven.

When all picked cartons have been loaded on a truck, the belt captain who heads up the loading team hits a "reconcile" key on the PC, and the system either confirms that the load is complete, or provides information on what products and how many cartons the load is still short.

In some cases, the short cartons may have had unreadable codes, and are waiting for the loaders on the reject conveyor line. "They can use a hand scanner there that's more forgiving than the tunnel scanners, and if they still can't read it with that, they can key it in," says McCraven. "But the point is, they get all of the products accurately on the truck. The system does not allow them to go to the next order until the first order is 100 percent complete."

Shortages slashed

Since installing the scanning tunnel systems last April, Lance has seen a 70 percent reduction in "load adjustments," says McCraven. Shortages reported by sales reps have dropped from 1,300 to 400 cases per week, and the company expects that figure to improve further, he says.

"We committed to saving the company $350,000 in the first year, and we're well on target to meet that. And that's just in lost product," McCraven says. "The other benefit is that our inventory accuracy is improved, which has improved our manufacturing scheduling," he adds. "So there are improvements upstream of the system as well."

Lance expects to achieve a return on its investment in the scanning systems by the end of 2003, only nine months after installation, McCraven concludes.